The Facts
The CPO AGM took place in the Harris Suite of Stamford Bridge at 11am on Friday 20 January 2012.
Having established a quorum, the new Chairman, Steve Frankham, declared proceedings open. A meeting which was always lively and occasionally boiled over into hostility against the board took questions from the floor right from the start.
The first speaker, David Sadler, wanted to know how ordinary shareholders could put forward resolutions for the AGM. This was born of his attempts to obtain an answer by both phone and e-mail. Bob Sewell had not known the answer and Mr Sadler complained that he had received no further response.
Bob Sewell responded to Mr Sadler’s question from the floor by referring the question to Andrew Edge of Stephen Harwood, CPO’s new lawyers, who was present at the meeting, to give his views. Mr Edge advised that to assist a shareholder in property was contrary to a duty of a director and that Mr Sadler should consult the 2006 Companies Act.
Steve Frankham asked CPO director Gray Smith to give an opinion on the technical legal position and Gray promised Mr Sadler that he would contact him with the correct representation, and called for greater transparency from the board as a whole on this issue. Mr Sadler stated that he considered the AGM just as important as the EGM, and Steve Frankham again promised the matter would be addressed.
Mr Sadler asked if it had occurred to the board that shareholders would wish to put resolutions from the floor and requested that in the absence of this occurring, the meeting should be voided. Mr Frankham advised that a further EGM would be called in which resolutions could be put forward by shareholders.
The second speaker wanted to know what the board of CPO was going to do in the next year, and if they were going to make “sensible” decisions. Steve Frankham stated that the company had been formed to sell shares, pay off the debt and look after the assets. At this point, Dennis Wise took the opportunity to promise honesty and that he had previously been on the board as Ken Bates hadn’t wanted the club to be sold to property developers. Mr Wise stressed that he was independent from the club and stated that he wanted all shareholders to put their views across.
Phil Roland addressed the issue of Resolution 9, relating to reinstatement of share sales and queried why this was an Ordinary Resolution rather than a Special Resolution. Hot on the heels of this, Dave Spring raised the issue of the disputed shares sold to shareholders believed to have an affinity with Chelsea FC. Mr Spring said he believed that any resolutions voted on would be nullified by these shares and accused Mr Frankham of not having dealt with the issue. Mr Spring proposed an adjustment and called for further clarification of the identity of the owners of said shares.
Steve Frankham advised that he had tasked Gray Smith with finding solutions to this issue, however Dave Spring stated that Gray Smith had already provided these answers, but the board had not acted on them.
The next speaker, Colin Simmonds asked if the board saw their responsibility as the selling of shares and paying off of the debt, which Steve Frankham said it was.
The meeting then moved on to the issue of developing Stamford Bridge. Gray Smith said the board were trying to keep Chelsea Pitch Owners separate from the football club, and the board of CPO had no right to be consulted by Chelsea FC. However, Steve Frankham added that the board were about to enter into dialogue with the club on the issue.
Tom Broderick stated that he had e-mailed Hammersmith & Fulham Council regarding the issue of ground expansion and that the Council were willing to explore all opportunities for redevelopment. Their feeling was that the club had sought to demonstrate that they were not able to expand the ground, but H&F were not convinced and needed to carry out further investigations to see if there were any viable propositions.
A major development in the meeting occurred when a speaker asked Bob Sewell, as one of only two members of the previous board present, why the previous board had exceeded the authority to sell no more than £100,000 of shares as agreed at the previous AGM in December 2010. Amidst some uproar, Mr Sewell responded that this was a “mistake” resulting from “human error”.
Rick Glanvill cited the difficulties in monitoring volumes of shares sold, and stated he felt that, given the fundamental issues that October’s EGM had presented, as many people as possible should have been given the opportunity to purchase shares. He added that he had not been aware of the limit [NB Rick Glanvill was not on the board of CPO at the time of the 2010 AGM], and that the issues surrounding this had given him sleepless nights.
Dave Spring asked if the issue of the exceeded share sale authority would now be dealt with by the board, and he was advised that a meeting had taken place on 30 November in which ways to make amends were discussed.
Former SNCPO stalwart James Greenbury rose to say that he looked forward to the report on the extra shares, and called for voting rights to be limited to one per shareholder. He suggested, to general applause and laughter, that if the board were unable to identify those recent bulk purchasers, Chelsea FC chairman Bruce Buck might be able to help them.
Clint Steele of SNCPO then initiated a discussion regarding the value of the shares themselves. Whilst the financial cost of a share remains £100, Clint called for an independent valuation to establish the “market value” of the share. Some speakers suggested that this might run into tens of thousands of pounds. Clint Steele stated he felt most shareholders there wouldn’t want their money back as CPO was set up to prevent the ground from being sold. As Roman Abramovich is the first new owner of the club since the founding of CPO, he felt a realistic assessment needed to be made of the market value.
Clint added that the additional sales over the authority in the autumn had made a farce of the meeting as if the bulk sold shares had registered their proxy votes, these would nullify the say of everyone else. Mr Steele also considered that if, had the proposal gone through in October, would these shareholders might have received their money back? If so, there might be a case to answer in respect of money laundering.
Rick Glanvill’s status as a director was once more called into question, and it emerged that former chairman Richard King had promised a vote on a resolution requiring all CPO board members to be shareholders, and although this proposal was voted through, it was never adopted. Steve Frankham advised he couldn’t comment on a matter which occurred in 2006. At this point, Dennis Wise provided laughter as he pulled a wad of banknotes from his pocket and handed them across the table to Mr Glanvill.
Rick Glanvill went on to clarify his position by stating that when he was appointed to the board of CPO in February 2011, he advised Richard King that he didn’t own a share, but was told it didn’t matter. He was sufficiently concerned about the issue that he had been going to purchase a share, but then as a result of Chelsea FC’s approach to the CPO board with their proposal forming the basis of the EGM, decided that purchasing a share at that stage would be perceived as opportunistic and look bad.
The meeting threatened to spiral into chaos, with calls for an open meeting to be held with Hammersmith & Fulham Council, and for an adjournment in the meantime. Paul Todd requested a straw poll for the latter and was refused. The board went on to state its opinion that voting rights should be limited to 10 per shareholder, however, as failing to pay off the loan would be a dereliction of duty, it would be wrong to stop people from buying shares.
Mr Gordon Isaacs was another speaker who called for an adjournment, stating that the only thing proven was the incompetence of the board. Steve Frankham advised that all share sold were legal, and the validity of this had been resolved. Concerns were raised regarding the poor maintenance of the share register and the need for a new class of share holding fewer voting rights.
Gray Smith reiterated his belief in the need for an EGM stating that many shareholders weren’t present at the AGM and that their views also needed to be represented.
Adil Pastakia made an impassioned speech saying that CPO was not about money, but if the proposal had been accepted at the EGM in October, CPO would have gone out of existence and the assets been handed over for a song. Mr Pastakia had looked at recent local property deals where land had been sold for in excess of £75 Million per acre. He also spoke in respect of the political situation in Russia and the problems which that might cause Roman Abramovich going forward.
Steve Frankham responded by saying that as a Chelsea fan, he would do everything possible to protect the asset and he was there to do his best for CPO. He was also in favour of CPO continuing at any new ground. Clint Steele asked if the board members were aware of the potential damage to their reputation should the safeguards provided by CPO be lost. Gray Smith said that CPO should be a wonderful asset available to the club, whoever owns it. However, at the present time, the board were not aware of any proposal to sell the ground and nothing to say that we would have to.
Rick Glanvill pointed out that as the board had not yet been re-elected, they were not in a position to discuss issues such as a further EGM. Steve Frankham made a further commitment to discuss the share issue, and Gray Smith opined that no further shares should be issued until after an EGM. Dennis Wise described himself as being “relaxed” about holding an EGM.
Roy Hinchcliffe of the Chelsea Supporters Club asked for minutes of board meetings to be published. Gray Smith commented the board would be unable to give a blanket commitment, but that he broadly agreed. From the floor, Julian East asked how could the board not make a commitment to transparency, to which Mr Smith responded that people had to have the chance to speak to the board confidentially.
Martin Knight called for Resolutions 9, 10 and 11 to be “knocked out” due to the bulk shareholders not being in attendance at the meeting.
Dan King of The Sun newspaper, who had carried stories relating to the identities of the bulk shareholders in the run-up to the meeting rose to ask if the board accepted the articles raised questions which needed to be addressed by CPO and CFC. Steve Frankham simply reiterated that Gray Smith would look into the matter, but eventually agreed that no shares would be sold until after the EGM.
Kim Holdaway, who had been a speaker at October’s EGM, asked if proxy voters had already cast their votes or whether they were at the chairman’s discretion. She called for Mr Frankham to either have the resolutions withdrawn, or to use his discretionary powers to try and have them voted down.
At this point – approximately 1.15pm – the debate concluded and the vote taken. The meeting was adjourned for the count, with many shareholders leaving. The vote was conducted under the auspices of the Electoral Reform Society and the results were returned as follows:
Resolution 1 (Accounts approval) For 3723 Against 279 Passed
Resolution 2 (Re-elect Steve Frankham) For 3247 Against 869 Passed
Resolution 3 (Re-elect Gray Smith) For 3363 Against 635 Passed
Resolution 4 (Re-elect Dennis Wise) For 3264 Against 856 Passed
Resolution 5 (Re-elect Rick Glanvill) For 3140 Against 983 Passed
Resolution 6 (Re-elect Bob Sewell) For 3106 Against 1015 Passed
Resolution 7 (Re-appoint auditors) For 3101 Against 920 Passed
Resolution 8 (Auditors remuneration) For 3156 Against 857 Passed
Resolution 9 (allotment of shares) For 2835 Against 1279 Passed
Resolution 10 (share issue special resol.) For 2802 Against 1220 Rejected (needed 75%)
Resolution 11 (Increase in directors to 7) For 2102 Against 1930 Rejected (needed 75%)
Gray Smith explained that as Resolution 10 was defeated, it had the effect of nullifying Resolution 9, in that shares could only now be sold to existing shareholders. As a result, shares sales would remain suspended pending an EGM, and Steve Frankham declared the meeting closed.
The Opinion
I always heave a huge sigh of relief when I’ve finished the bit above and turn to my impressions of the event. Firstly, it was great to see that the momentum of shareholder interest carried over from the EGM. To have 150 – 170 people turn up on a working day is no mean feat and demonstrates how much the issues surrounding CPO have now come to mean to people.
I’m reliably informed that the biscuits, although reduced in quantity from the last AGM, were excellent, however I can’t personally vouch for this (although the man *coughtimrollscough* who ate most of them can). It was also good to see many familiar faces in attendance.
I genuinely don’t believe the atmosphere in the room was quite as bad as it was at the EGM, but that could be due to the fact that we now have some breathing space in which all parties can come together and take matters forward ahead of any future proposals made by the club.
Rick Glanvill, to my mind, provided a totally reasonable explanation as to why he didn’t buy a CPO share. But I just wish to heaven that he had been able to come out and state the precise reason prior to the EGM in October. I honestly believe he was hamstrung by the edict that no director would speak publicly about CPO, and that if he’d been able to publicly clarify his position he would not have received so much of the (in any case unreasonable and unjustifiable) abuse that he was subject to.
One of the really pleasing aspects were the suggestions that were put forward from the floor. In particular, when share sales re-open, it would be hugely beneficial to our younger and less well-off fans if they could purchase shares and pay by Direct Debit/Standing Order. This will give the opportunity for even more supporters to become shareholders.
However, I am concerned that the issue of the “market value” of the shares is starting to raise its ugly head. Whilst there is no getting away from the fact that if last October’s proposal had succeeded Chelsea FC would have come into possession of the assets (i.e. the lease) of CPO at a fraction of the true market value, if too much emphasis is placed on what a share is worth, shareholders may well start to lose sight of what the share represents.
A share in CPO should represent what you feel in your heart about the club. When people get engaged, surely they don’t’ see the ring as “hmm, that’s gonna be worth a few quid in 20 years’ time, we’ll be able to flog it”. They think “that’s a pledge of love and commitment”. The same should be true of a CPO share. It should be a pledge of the love and commitment you feel toward Chelsea FC. The fact you want to protect it, not just now, but always.
Whilst many of the speakers on Friday could reasonably be described as the usual suspects (in my case, guilty as charged), it was good to see so many participants recognised by the chair. In particular, Adil Pastakia’s contribution was outstanding.
It is of interest that only one speaker, Michael Volpe, gave 100% support to the board of CPO, and the voting figures suggest that a large number of voting shareholders have misgivings about all board members. Indeed, one shareholder said to me afterwards, “how Bob Sewell is still on the board after this is unbelievable”.
Well, all the board have been re-elected, and they now need to sit down and decide exactly how they are going to take CPO forward, and prepare for another EGM in the spring at which another attempt at thrashing out outstanding matters will be made.
It will be interesting to see in the light of the rejection of Resolution 11 whether an ad hoc decision will be taken to expand the board, as it was in November, or whether Steve Frankham will decide to stick with what he’s got. It is arguable that in Gray Smith, whose performance on Friday was outstanding, the Say No lobby have sufficient representation on the board for the time being. One thing is certain, if a proposal to extend the board is put forward again at the EGM, this time prospective candidates will be ready and waiting.
As usual, apologies to anyone whose name I’ve misspelt; any errors of fact are mine and unintentional.
I’d like to thank Tim Rolls for keeping a better record of the results, which I have used above, than I did. His own splendid take on the meeting is at plainsofalmeria.com, and you can find his brilliant Pythonesque-parody of the CPO factions there too.
Follow me on Twitter @BlueBaby67; the SNCPO campaign team are @SayNoCPO; the delightfully named cerebral blog is @plainsofalmeria; and @CFCTruth provides an alternative view of CPO issues.
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